When it comes to crowdfunding, Kim Wales, founder and CEO of Wales Capital is set to attend Black Enterprise’s Entrepreneurs Summit (ES), May 11-14, to provide expertise during the session, “Crowdfunding & The Art of Asking for Money.” Her company, Wales Capital, is a leading resource in the industry on crowdfunding. Check out her thoughts on what’s next in the sector:
BlackEnterprise.com: What is the future of crowdfunding?
Kim Wales: The future of crowdfunding is the democratization of capital. That means everyone, no matter how large or small a company, should be able to get funding and get that money from a large group of people. You should be able to do that through mechanisms like the internet [that] basically gives you a gateway to access investors you never had access to. That is where crowdfunding is and where it is going to be expanded. And over time, it’s going to lessen the inequality gap.
How does the internet lessen the inequality gap?
Today, when an entrepreneur is trying to raise money, they tend to only have access to the people that they know in their direct sphere—generally the people in their local community, where they live or work. The Internet democratizes the ability to connect with people outside of your immediate community.
The second thing is that if you can harvest your network, which we call social capital or social equity, it means that your relationship can not only be large and broad, but also very deep. With my network, if I like what I see from you and your business, I’m going to tell my friends and community. I’ve expanded our reach. The Internet allows us to democratize capital even further, and this is all driven clearly because of the securities laws that changed. You couldn’t conduct general solicitation advertising. Legislation [was] adopted in 2012 which now allows you to use things like the Internet to promote your deal.
When companies bring Wales Capital on to take them from insight to action, what are the misconceptions they may have about what that means?
Everything is a process. If nothing else, I like to instill in people that it’s not about asking one person or two people for large sums of money. There’s a way to access a larger amount of money by asking for smaller dollar amounts. That’s what really drives crowdfunding. And for minorities, minorities of color and women, we should get very comfortable with the idea of giving equity in our company away. Often we don’t understand what it really means to build a business. And we need to feel comfortable in knowing that if we’re bringing the right amount of money and right amount of skill set, we [should be] willing to allow someone else to take part ownership of our business. Not that they lead or run the company. But they get some long term value for giving us money.
What’s one of the most important points you plan to make on your panel at the Entrepreneurs Summit, “Crowdfunding & The Art of Asking for Money?”
I think people should walk away taking responsibility for their future. The jobs acts has empowered us. Most people don’t realize that. It is the catalyst to empower us to create our own wealth and to allow us to create wealth for the generations to come.
The Black Enterprise Entrepreneurs Summit hosted by Nationwide is set for May 13-16, 2015 at the Hyatt Regency Atlanta. Expect innovative sessions, high-powered speakers, and an early peek at the products, trends, and services you’ll need to stay ahead of the curve. To register and find out more, visit www.blackenterprise.com/es/. Join us at the Entrepreneurs Summit, Where Innovation and Capital Meet.